Mutually Assured Destruction Looms In Using Financial Weapons Against Moscow

Here is another—very critical—aspect of the showdown between Russia and the United States over Crimea and Ukraine.

I post this for the analysis, not necessarily for the recommendations in the final couple of paragraphs–those decisions are yours to make with much more research than this one article.

From the New Darrien Times:

It is true that the United States has powerful financial weapons it can use against Russia. The United States can freeze the assets of Russian leaders and oligarchs that can be found both in United States banks and foreign banks that do business in dollars. The United States can deny Russian access to the dollar payments system and work with allies to deny Russian access to the SWIFT system in Belgium that processes payments in all currencies, not just dollars. Many of these tactics have, in fact, been used against Iran and Syria in the financial war that has been going on in the Middle East and Persian Gulf since 2012.

But, Russia is not without financial weapons of its own. Russians could refuse to pay dollar-denominated debts to United States and multilateral lenders. Russia could dump the billions of dollars of United States Treasury notes they own thus driving up United States interest rates and hurting the United States stock and bond markets. Most ominously, Russia could unleash its hackers, among the best in the world, to crash United States stock exchanges. On August 22, 2013 the NASDAQ stock market crashed for half a trading day and no credible explanation has yet been offered for the crash. Hacking by Syrian, Iranian or Russian cyber warriors cannot be ruled out. This may have been a warning to the United States about enemy capabilities.

Germany and its banks, in particular, are perilously exposed if sanctions are initiated. And if German banks teeter and collapse, a significant portion of the $1.4-quadrillion in derivatives will immediately be revealed as the “Weapons of Financial Mass Destruction” Warren Buffett warned us about, and threaten to take down America’s big banks too.